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Higher Wages in Exporting Firms: Self-selection, Export Effect, or Both? First Evidence from German Linked Employer-Employee Data

Author

Listed:
  • Thorsten Schank

    (Chair of Labour and Regional Economics, Friedrich-Alexander-University Erlangen-Nuremberg)

  • Claus Schnabel

    (Chair of Labour and Regional Economics, Friedrich-Alexander-University Erlangen-Nuremberg)

  • Joachim Wagner

    (Institute of Economics, Leuphana University of Lüneburg)

Abstract

ABSTRACT: While it is a stylized fact that exporting firms pay higher wages than non-exporting firms, the direction of the link between exporting and wages is less clear. Using a rich set of German linked employer-employee panel data we follow over time plants that start to export. We show that the exporter wage premium does already exist in the years before firms start to export, and that it does not increase in the following years. Higher wages in exporting firms are thus due to self-selection of more productive, better paying firms into export markets; they are not caused by export activities.

Suggested Citation

  • Thorsten Schank & Claus Schnabel & Joachim Wagner, 2008. "Higher Wages in Exporting Firms: Self-selection, Export Effect, or Both? First Evidence from German Linked Employer-Employee Data," Working Paper Series in Economics 74, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:74
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Achim Schmillen, 2016. "The Exporter Wage Premium Reconsidered—Destinations, Distances and Linked Employer–Employee Data," Review of Development Economics, Wiley Blackwell, vol. 20(2), pages 531-546, May.
    2. Joachim Wagner, 2019. "Effect of international activity on firm performance," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-47, November.
    3. Görg, Holger & Hanley, Aoife, 2017. "Globalization: Implications for firms in Germany," Working Papers 04/2017, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    4. Joachim Wagner, 2009. "Exporte und Firmenerfolg: Welche Firmen profitieren wie vom internationalen Handel?," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 3(2), pages 109-122, October.
    5. Cirera, Xavier & Martins-Neto, Antonio Soares, 2023. "Do innovative firms pay higher wages? Micro-level evidence from Brazil," Research Policy, Elsevier, vol. 52(1).
    6. Hernández, Pedro, 2012. "Is there a producer quality wage premium similar to the exporter wage premium?," MPRA Paper 41082, University Library of Munich, Germany.
    7. Ramona Dumitriu & Razvan Stefanescu, 2015. "The Relationship Between Romanian Exports And Economic Growth After The Adhesion To European Union," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 17-26.
    8. Pflüger Michael & Blien Uwe & Moritz Michael & Möller Joachim, 2013. "Labor Market Effects of Trade and FDI – Recent Advances and Research Gaps," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(1), pages 86-116, February.
    9. Roxanne Merenda, 2021. "The Determinants of Competitiveness of the Portuguese Defense Industry," GEE Papers 0159, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Nov 2021.
    10. Francisco Alcalá & Pedro Hernández, 2010. "Firms’ main market, human capital, and wages," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 1(4), pages 433-458, September.
    11. Alina Grecu & Wolfgang Sofka & Marcus M. Larsen & Torben Pedersen, 2022. "Unintended signals: Why companies with a history of offshoring have to pay wage penalties for new hires," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(3), pages 534-549, April.

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    More about this item

    Keywords

    exports; wages; exporter wage premium; Germany;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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